SpiceJet’s shares had declined about 14% till Tuesday since IndiGo announced its results on 1 August. But SpiceJet’s June quarter performance changed the trend. Its share price closed 16% higher on Wednesday.

To be sure, it’s not as if SpiceJet’s fares haven’t declined. They did, by 3% year-on-year. But this decline was smaller than expected. In comparison, IndiGo’s average fare had declined 11%. Further, a combination of 37% increase in capacity, an impressive 92.5% load factor and 64% growth in ancillary revenue helped SpiceJet’s revenue grow 37% to Rs.1,521 crore, according to Kiran Koteshwar, chief financial officer of SpiceJet. Ancillary revenue includes ticket cancellation charges, excess baggage fees, sales of on-board meals, etc.

Of course, the lower fuel cost environment helped. Fuel costs as a percentage of revenues declined to 26% from 32% last year though the measure was higher sequentially. But SpiceJet’s cost per available seat kilometre, or CASK, excluding fuel costs increased 3%. That was on account of the rupee’s depreciation and a general inflationary pressure, said Koteshwar.

Overall operating costs grew at a relatively slower pace than revenues. As a result, operating profit and Ebitdar increased 53% and 57%, respectively, to Rs.192 crore and Rs.451.8 crore. Ebitdar stands for earnings before interest, taxes, depreciation, amortization and lease rentals. SpiceJet’s Ebitdar margin came in at 30%, representing an increase over the June 2015 quarter. In comparison, IndiGo’s Ebitdar margin had declined year-on-year to 33% last quarter.

Flat depreciation costs and a decline in finance costs helped SpiceJet’s net profit more than double to Rs.149 crore. From here on, the outlook really depends on whether the airline can put up such a stellar show on a consistent basis. Domestic passenger growth remains strong. But the current quarter is typically a lean one for the sector and the numbers of aviation companies should reflect that. Despite the recent underperformance, SpiceJet shares have meaningfully outperformed the Sensex in the last one year.